Consumer Goods

Consumer goods are products bought for consumption by the average consumer. Also called final goods, consumer goods are the end result of production and manufacturing. Clothing, food products, and dishwashers are examples of common consumer goods.

The Consumer Product Safety Act of 1972 regulates the sale of most common consumer goods and created the US Consumer Product Safety Commission, a group of five appointed officials who oversee the safety of products and issue necessary recalls of faulty consumer products.

How the consumer views and uses a product determines the way companies market their goods.

Convenience goods are those that are regularly consumed and are readily available for purchase. They are often nondurable goods and low-priced items sold by wholesalers and retailers. Examples of convenience goods include milk and tobacco products.

 Shopping goods are those items bought less frequently, are durable, and are commonly more expensive than convenience goods. Examples of shopping goods include furniture and televisions.

Specialty consumer goods are rare and often considered luxury purchases. They are often marketed by brand or geared to a niche market. Sports cars and fine art are examples of specialty consumer goods.

Unsought consumer goods are readily available but not often sought by the consumer. Although they may be necessary purchases, they require marketing to consumers to nudge a purchase. Examples of unsought consumer goods include life insurance and pre-paid funeral expenses.

Fast-moving consumer goods include nondurable goods like food and drinks that move rapidly through the supply chain from producers to distributors and retailers to consumers. Companies and retailers like this segment as it offers high shelf-space turnover opportunities. Consumer goods are considered a sector for investment. Investors can purchase shares of funds which include companies that produce consumer goods. The largest consumer goods ETF is the iShares U.S. Consumer Staples ETF (IYK). With 58 stock holdings and $954 million in net assets under management (AUM) as of February 2022, the fund's top holdings are Procter & Gamble, Coca-Cola, PepsiCo, Philip Morris, and CVS.

Capital goods, such as buildings, machinery, equipment, vehicles, and tools, are physical assets that a company uses in the production process to manufacture products and services that consumers will later use.

Capital goods are not finished goods but are used to make finished goods. Consumer goods are those used by consumers and have no future productive use. A consumer good, or final good, is the end product a business produces that is purchased by a consumer. Consumer goods can be classified as durable, non-durable, or services.

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